After reporting severely disappointing holiday sales figures, Macy’s is undertaking a plan to close dozens of stores and fire more than 4,800 workers.
The nation’s largest department store chain announced this month that just over 2,000 of the job cuts will come from reshuffling positions at corporate offices, reducing staff, and consolidating regional offices, while the rest will come from the closing of stores.
Macy’s spokesman Jim Sluzewski said the company is looking to shed 4,820 of its approximately 163,000 employees.
The chain blamed its financial woes on a long list of reasons including the changing way people are shopping, the stronger U.S. dollar making foreign supplies more costly, lower levels of spending by consumers, and even a warmer winter that kept people from buying cold weather clothing like coats, boots, and hats.
Macy’s also noted that consumers are drifting away from department stores when looking to buy clothing and that has cut into the store’s bottom line as well.
Along with four stores the chain already closed down last year, Macy’s announced a list of 36 more store closings to take place across the country this year.
In its press release announcing the list of stores that will be closing, Macy’s said it was moving to implement a “series of cost-efficiency and process improvement measures.”
“In light of our disappointing 2015 sales and earnings performance, we are making adjustments to become more efficient and productive in our operations. Moreover, we believe we can operate more effectively with an organization that is flatter and more agile so we can pursue growth and regain market share in our core Macy’s and Bloomingdale’s omnichannel businesses faster and with more intensity. We will continue to invest in strategic initiatives that anticipate emerging customer needs and create shareholder value,” said Terry J. Lundgren, chairman and chief executive officer of Macy’s, Inc. “The cost efficiencies represent more than two-thirds of our goal of annual SG&A expense reduction of $500 million, net of growth initiatives, from previously planned levels by 2018. In some cases, there will be short-term pain as we tighten our belt and realign our resources. But our eye is on a long-term vision of Macy’s, Inc. as a dynamic retailer that serves existing customers and acquires new ones through innovative approaches to the marketplace.”
The company warned investors that it expects its profit for its fiscal fourth quarter and full year to fall short of the expected estimates.
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